Need Personal Loan now

Unlike a car loan or a mortgage, a personal loan is often flexible, offering many options to the consumer. You can use the money to buy a car or perhaps even a house, but you can also use the funds from personal loans to cover your cell phone bill or even go on a shopping spree.

Personal loans can also be easier to obtain than other types of loans – depending on the lender. But sometimes the easiest loan to obtain is not the best loan for your financial health. This is just one of the many important aspects to consider before obtaining a personal loan.

What Credit Score Is Required?

Many personal loans are obtained solely on the basis of your credit profile, rather than by submitting a complex business plan or by offering collateral such as a house or a car. Such loans are also known as signature loans because the only real guarantee of payment is your signature on the loan agreement papers.

Your credit score weighs heavily on whether you are approved for conventional personal loans. Some lenders, such as credit unions and companies like LoanNow, look at your entire credit profile rather than just your credit score, which may make it easier or more difficult to be approved.

What Is the Interest Rate and APR?

Depending on your credit profile and your lender, the interest rate and annual percentage rate (APR) for personal loans can vary widely. Some loans, such as those from credit unions or banks, charge very low interest rates for customers with good or excellent credit. Conventional finance companies charge interest rates that are higher than credit cards, especially to customers with poor credit.

Conventional personal loans have the advantage of being installment based, rather than on revolving credit. Payments made to installment loans gradually reduce the principle on the loan until the loan is repaid in full. In contrast, if you only make the minimum payment on a credit card (which is a type of revolving credit), you could potentially make payments for years without actually reducing the total amount that you owe.

Some signature loans, primarily payday loans, do not run conventional credit checks at all. Instead, payday lenders compensate for fairly lax credit underwriting standards by charging outrageously high interest rates that range well into three figures. While payday loans are marketed as short-term quick fixes, these loans can get very difficult to pay off in full, and can multiply quickly until you owe more than what you originally borrowed. According to a study published by the CFPB, the average payday borrower is on the cycle for 5 months out of a year, with an average APR of 339%.

What Is the Loan Repayment Period?

Repayment periods for conventional loans usually range from several months to several years. Payday loans have repayment periods that are measured in weeks or days, because they are tied to your pay periods. Repayment periods for pawn shops vary, but are closer to those for payday loans rather than for those for conventional lenders.

Is Collateral Required?

Many personal loans do not require collateral. But “borrowing” from a pawn shop requires you to relinquish your personal property in exchange for the loan. In addition, some payday lenders or title lenders require you to give up the title to your car or your home in exchange for the loan. Even though they possess this collateral, you actually still get to remain in your house or keep possession of your car. But if you fall behind in your payments, your house or car are in jeopardy of being seized to repay your loan.

Interesting facts

• Investours is an organization that combines microfinance and educational tourism.
  It is a non-profit organization with operations in Mexico and Tanzania. Investours "educates and mobilizes travelers and micro-entrepreneurs across the world to reshape educational tourism and the global fight against poverty."
  Investours runs "microfinance tours...
• The U.S. Small Business Administration Community Advantage Loan program is designed for new and existing businesses that need loans under $250,000. The loan can be used to finance a startup company or expand an existing small business or buy real estate. The SBA guarantees 85 percent of loans up to $150,000 and 75 percent of loans greater than...